- Region: Europe
- Energy and Natural Resources
- Machinery and Equipment
- Export Loans
June 8, 2007
Japan Bank for International Cooperation (JBIC; Governor: Kyosuke Shinozawa) signed on June 6 an agreement offering an export credit line*1totaling up to US$100 million with the Joint-Stock Bank of the Gas Industry Gazprombank, the third largest commercial bank in Russia.
facility will fund Russian companies, via Gazprombank, as they import machinery and equipment from Japan. It will finance the export of Japanese firms including but not limited to followings: (1) gas, oil and other energy-related projects utilizing plant and equipment exported from Japan; (2) telecommunications infrastructure development projects drawing on Japanese telecommunications technology; and (3) manufacturing projects that utilize Japanese energy conservation technology.
Russia has sustained high economic growth in recent years driven by the resurging domestic industry and high oil prices.*2Japanese firms are thus increasingly engaging in business transactions with Russia.*3In the meantime, apart from doing business with Gazprom group*4companies, Gazprombank has been actively conducting business operations in such sectors as oil, gas and other energy sources, telecommunications, manufacturing and electric power, where the Japanese firms has advanced technology and abundant expertise and know-how. Under these circumstances, JBIC has received a large number of requests to provide a credit line from the Japanese companies seeking to increase transactions with Russian firms operating in these sectors.
JBIC will continue to support Japanese firms' acquisition of business opportunities in Russia by assessing their needs for doing business there, as well as by utilizing its financial menu, including loans where JBIC will directly assume the credit risk of Russian firms and banks, two-step loans, and a guarantee facility.
- *1An export credit line facility is a form of export financing that predefines the maximum amount of credit to be extended and is utilized to facilitate Japanese exports of machinery and equipment.
- *2Russian GDP grew 6.4% in 2005 and 6.7% (preliminary) in 2006.
- *3In the Survey Report on Overseas Business Operations by Japanese Manufacturing Companies, an annual survey conducted by JBIC in fiscal 2006, Japanese manufacturing companies indicated growing interest in Russia, ranking it 6th among the most promising destinations for business expansion over the medium and long term.
- *4A business group lead by Gazprom, the largest natural gas company in the world.